Internet radio in the US has been under threat recently, after the US Copyright Royalty Board (CRB) endorsed a plan to retroactively raise the royalty fees paid by webcasters.

However, SoundExchange, the organisation responsible for collecting the royalties from internet radio services, has offered to reduce the rates paid by smaller webcasters.

If the offer is accepted, small webcasters will pay royalty fees of 10% of all gross revenue up to $250,000 (£125,000) and 12% for revenue above that amount until 2010, up to a ceiling of $1.25m (£630,000).

It is these smaller webcasters that were thought to be under the greatest threat from the CRB ruling as, in many cases, the new royalty rates would result in firms paying more in royalty fees than they earn.

But the offer has not been welcomed by SaveNetRadio, the group formed to protest against the new fees, arguing that the new plan would still leave bigger webcasters in trouble while limiting the growth of smaller players.

According to spokesperson Jake Ward:

“Under government-set revenue caps, webcasters will invest less, innovate less and promote less. Under this proposal, Internet radio would become a lousy long-term business, unable to compete effectively against big broadcast and big satellite radio."

Graham Charlton

Published 24 May, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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